What Is The Ideal Savings to Spending Monthly Ratio?

thriftysach on 11/09/2020 - 00:26

I am in a position where I can comfortably save around 70% of my income. My month goes by tracking everything I spend my money on and recording all my income. I don't have any essential expenses such as rent/bills/etc.

I also pretty much only spend on transport, eating out and shopping.

To put this more in context, I gross around 2.5-4k a month depending on how much I work. I work 2 different jobs, accumulating 15-40h a week and also do full-time uni. I have been hitting my savings goal of 2k+ every month for the past 6 months.

What are some tips for me to perhaps improve more in savings?

Any tips appreciated. Thanks

Financial

Comments

  • Hybroid on 11/09/2020 - 00:34
    +7

    You gross (not net) 2.5-4k a month but still save 2k+ a month?

    While working up to 40 hours a week and full-time Uni. Huh? Did you invent a time machine or freeze ray?

    • bobbified on 11/09/2020 - 08:05

      What's wrong with that? It's not actually that uncommon for students to work and study stupid hours.

    • Zephyrus on 11/09/2020 - 08:37
      +2

      Doesn't pay rent. Sounds like they don't pay for their own food (unless out).

      They're literally spending $500 - $2000 a month on (mostly) non-essential stuff. If you added in essential stuff, they're not doing super great.

    • 87percent on 11/09/2020 - 09:00
      +4

      Lives at home, doesn’t support parents with bills/groceries, mummy and daddy bought him a car

      • AustriaBargain on 11/09/2020 - 10:21

        He's probably set to inherit a fund in 20 years too.

      • thriftysach on 11/09/2020 - 11:12

        Yes, live at home, don't support with bills and groceries, but no, still saving up for a car, It is a bit hard to save up for a car on top of my 2,000 Monthly goal but I am predicted to get there in a few months. What I mean to say is that I save up 2,000 first, then whatever is left over, I save for the car. This way, when I do buy the car, it's a completely anticipated purchase.

      • cantthinkofone on 11/09/2020 - 17:17
        +5

        the bloke is still full time uni like he said. shouldn't need to take the piss and judge him for not supporting his parents with bills or groceries.

    • thriftysach on 11/09/2020 - 11:10

      I make around 4k when it's the breaks from uni, otherwise, I significantly cut back on my hours and spending as well, hence the 2.5k.

  • Mechz on 11/09/2020 - 00:57
    +4

    You're doing great, don't over think it. If anything just spend less on shopping.

  • brad1-8tsi on 11/09/2020 - 01:20
    +3

    I suggest you read Aussie Firebug blog and maybe investigate the FIRE movement. Some of the folks are a bit extreme but you'll get an idea of what works for you and what doesn't.

    If you are saving 70% that's a great effort but personally, I'd be doing more than just plonking the money in a savings account.

    • thriftysach on 11/09/2020 - 11:20

      I just have this immense fear of losing money, that's why I haven't gotten into stocks or anything of that sort. I will investigate this movement you are proposing, thanks.

      • brad1-8tsi on 11/09/2020 - 15:09

        In a savings account you lose money every day as inflation is higher than the account interest rate.

        Have a read of The Barefoot Investor too. I don't agree with everything he writes but it's a strategy has merit.

        If you spread your investments over several asset classes (high interest savings account, broad sharemarket based ETF, Property based ETF, Environmental ETF, P2P lending, etc, that will spread your risk and if you dollar cost average the investment over a period of time, the long term likelihood of losing money is quite low.

  • garetz on 11/09/2020 - 03:08

    The only tip you need is to go over your expenditures, see where you are frivolously spending money then cut down on that expenditure.

    • thriftysach on 11/09/2020 - 11:14

      I do frivolously spend on eating out, which I am trying to cut back on since it has started to creep up my spending as of late.

      • brad1-8tsi on 11/09/2020 - 15:11

        I recommend that anyone that lives frugally reward themselves either on a regular basis or when milestones are achieved.

        Life is pointless if you don't do the things you enjoy. It's all about balance.

  • bobbified on 11/09/2020 - 07:56
    +1

    What Is The Ideal Savings to Spending Monthly Ratio?

    I generally do about 50% savings and 50% spending. Sometimes I go over.
    While savings is necessary, I think it's also important to be able to give yourself plenty to enjoy life too, rather than trying to save every dollar.
    "Work hard, play hard" is what they say, isn't it? :)

  • RM on 11/09/2020 - 08:36
    +1

    If anything this job crisis has taught us is to save more while you can.

    Move your goal of you've hit your goal for the last 6 months…

  • Zephyrus on 11/09/2020 - 08:38
    +5

    Look up a market rent + say $200 a month in essential stuff that you're not paying. Pretend you have to pay that as well and see how that affects your spending.
    One day you'll move out of home and that will be your reality.

    • thriftysach on 11/09/2020 - 11:17

      That sounds like a good idea!

  • Candour on 11/09/2020 - 08:40
    +1

    put your savings into super. tax benefits. save in safe options or long term and short term risks o recession are high

    • brad1-8tsi on 11/09/2020 - 15:17

      I'm a big fan of adding extra to super but you have to make sure it fits in with an individuals circumstances. There isn't a lot of advantage to making extra contributions if you earn <$37k (the 19c tax bracket) just add enough to get the gov't co-contribution which cuts out at $53,564.

      • Candour on 12/09/2020 - 16:46

        yes. but putting extra in for this guy may pay off in terms o his final nest egg. the matters are complex and require a planner, not OB.

  • scrambledeggs on 11/09/2020 - 09:50
    +4

    Humble bragger gets called out for living at home, lol

  • netjock on 11/09/2020 - 09:58
    +1

    70% you are doing great.

    If you think you can squeeze more you need to look at fixed vs variable expenses. Don't cut down on car insurance! Self insurance doesn't pay.

    I save 50% net pay (nothing I can do about tax) but that is after maxing out my annual super contribution limit of $25k.

    Dividends from shareholdings are considered extras (like a bonus) because they can get cut (like right now).

  • DingoBilly on 11/09/2020 - 10:28
    +2

    It's all dependent on your situation.

    For some, saving 75% of your income would be great (living at home for example).

    For others, 5% would be great if they've lost their job and are struggling a bit.

  • smoo on 11/09/2020 - 13:08
    +1

    [Mr Money Mustache] (https://www.mrmoneymustache.com/)

  • Melb69 on 11/09/2020 - 13:09

    If you haven't already set up a separate high interest account do that. ING has an everday account. Then move any amount to the ING max account for savings. Only really access the daily and keep that within your daily expenses, so you don't access the Max account till you need it for a car or house deposit.

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